China

China's workforce

Will you still need me?

ON FRIDAY, the National Bureau of Statistics announced that China's working-age population shrank last year. In the slow-moving world of demographics, that felt like a dramatic turning point: "peak toil", if you like. The mobilisation of Chinese labour over the past 35 years has shaken the world. Never before has the global economy benefited from such a large addition of human energy.

And now the additions are over. The ending came rather sooner than expected. The percentage of Chinese who are of working age started falling in 2011. But the number of working-age Chinese was expected to grow for a few more years yet. As recently as 2005, official projections suggested it would grow until the mid-2020s.

I'm not sure why demographers got it wrong. Predicting future rates of longevity and especially fertility is undeniably hard. But surely it isn't that difficult to figure out how many people aged seven today will become 15 (and thus of working age) in eight years' time. Therefore, it shouldn't be that hard to predict the near future of the working-age population. Perhaps the difficulty lies not with prediction so much as measurement. As I understand it, the yearly estimates of China's population are based on an annual national survey of about 1.5m people. Given the size of China's population, it would be easy to miscalculate the numbers by a few million here or there. Such errors could easily throw a projection out by a few years.

Also worth bearing in mind is the definition of working age. In last year's press release, working age was defined as 15-64 years old. That is a common age range used by the UN's Population Division and China's own Statistical Yearbook. But for the purposes of Friday's press conference, the NBS changed the definition, referring instead to 15-59 year olds. The number of Chinese in this age group declined by 3.45m, it reported (see chart). But the number of people aged 15-64 seems to be increasing still. It rose to 1.004 billion in 2012 (I inferred this total based on other numbers provided in the press conference).

There's nothing wrong with either age range. The 15-64 range reflects common international practice and China's own past definition. The 15-59 range is probably a better reflection of China's economic reality, where men can retire from formal jobs at 60 and women often retire five or ten years earlier. (According to the National Transfer Accounts pioneered by Ronald Lee and Andrew Mason, 60 is the age at which the average Chinese earns less than he consumes, becoming, in effect, a dependant.)

But it's interesting that the NBS chose to rejig the definition of working age for this press conference. One can only assume they chose the 15-59 age group precisely because its numbers are already declining. That allowed them to highlight a worrying demographic trend. In response to a reporter's question, Ma Jiantang, the head of the NBS, said he did not want the population figures to be lost in the sea of data.

It is almost as if China's statisticians decided to set the clock a few minutes fast to make sure China's policymakers have good time to prepare for their impending demographic duties.

As per the data, china has approx 10more years before the 15-64 age grop starts falling, nsb changed the def to give policy makers an Extra dose of precaution. I believe the one child policy only affects 64 pct of the population and is slowly being lifted to allow more babies to be born.
Overall working age population will decline but at the same time lot of the sweat shops will also move out to poorer countries, leaving the workforce to concentrate on higher valued add industries. All is not lost yet, like the doomsayers here would like you to believe. South Korea and Japan have done it before, china too will transition.

Firstly,I have to remind everybody that Germany is also one of the oldest countries in the world,even older than Japan,but Germany still has a very considerable economic growth in last 10 years.Although I don't deny the negative effects of population aging etc. in Japan or other countries,but Japan's economic decline relatively mainly dues to its falling competitiveness in technology and management etc.and other countries,especially S.Korea and China, quickly narrow technology and management gaps.For example,China or S.Korea also prove that they also can product higher quality products than Japan such as all kind of mobile phones etc..Before 90's,Japan was lack of strong powerful competitors,many countries still just restarted in Japan's dominant industries although Japan still has very strong advantages in many fields.

Secondly,actually China still has a huge so-called "demographic dividend",for example, in Guizhou or Yunnan,Henan provinces,many people still work on very low salaries,if China wants to exploit more "demographic dividend",it can provide more free professional and technical trainings for the poor,instead of economic aid simply.On the contrary, unemployment is a more serious problem in many areas in China.

Thirdly,the readjustment of industrial structure means China will more and more surplus labor force in many industries,for example,advanced agricultural machineries can and will be substitute for a large number of inefficient agricultural Labour force.China needn't 300-500 million farmers work in their farmlands in the future although many farmers already become modern industrial workers and managers in many fields.

Finally,in my opinion,theoretically China can double its labor's productivity easily only through widely application and popularization of the best technologies and management skills which it already has.Half of population,750 million,is already enough to create the same size of the GDP of China now.The other half poplultion ,750 million,is only wasting working hours in farmlands or other fields.

Simple and low-level,repetitive works can not make a person or a country become richer.so-called "demographic dividend" can only create more low salary jobs,workers can not get more money.Same productivity can not correspond to higher salary,or else,you can get a inflation only.

If China want to become richer relatively,China need do what the richest countries are doing and will do in their futures:producing high value-added products and services, invest more funds in the high-tech industries,improving education quality and actively introduce advanced technology etc.

Its rather astounding how Japanese managed to fall in love with americans and after getting nuked nevertheless.Pitiful stockholm syndromed nation with a culture stongly bent on serving pedo urges of people all over the world.

The situation is no different from Stalin's Russia, where the entire state statistical office was purged over release of data from a state census that showed tens of millions of people missing. (The missing millions were the victims of the Gulag extermination camps.) Likewise, statistics in China and North Korea is a highly politically charged matter. The Party has cost China something of the order of a hundred million murders. It is critical that information about these crimes is concealed from the Chinese people by statistical manipulations that allow the demographics to appear normal.

I would like to answer the question by quoting the discourse published in another TE article titled ‘Peak Toil’;
‘But China owes the bulk of its growth not to adding labor or moving it, but to augmenting it—raising its productivity within industry. The secret of China’s success lies not in the workers it adds, but in what new capital, technology and know-how adds to its workers.’

What CCP or Chinese government is to do should be increasing quality of labor force through education and training, rather than increasing the number of labors through letting go of the birth control, especially in process of urbanization.

Your comments is spoken for the Chinese readers only as the propaganda of the CCP, boy.
The fact is that the majority of the Japanese people accept the status and they are more than happy with it against Chinese and Russian militarism. Therefore your comment is useless.
Furthermore people in Japan does not want to spend so much money as China or Russia or USA for the army.
Least expense brings maximum profit, boy.
Maybe Japan is too cunning?

China having an annual GDP growth of around 4% by 2030 sounds right, but...

"The one-time urbanization dividend, where the GDP of a country rises due to people migrating from rural to urban areas. This has already occurred in China over the past two decades."

This is still occuring. China is only ~50% urbanized at this point. A significant percentage of China's population are still farmers who are not much above subsistence level. The migration from the countryside ot the cities will continue for years to come.

"China already has built up its infrastructure to Western levels and from this point onward the return on investment will drop"

China has 497 airports (452 with paved runways) compared to 15,079 (5,194 with paved runways) in the USA. China has 86,000 km of railways (this statistic is couple of years old) compared to 224,792 km in the USA. China has more than 4 times as many people as the USA. China will need to continue building infrastructure for many years to come to catch up with the west.

That is quite insightful, really. Chinese people's lives have changed tremendously in the past, you can put it as improved or just materialized improvement. There was no such thing as social security before, so people's expectations might be lower than what the government can provide. But there is also widespread outcry against monoply of SOEs that only benefit a small part of the population. Those officials consume an alarmingly large part of the Chinese wealth. So lower expectations can also be understood as weak trust for the government. I say this as I am a Chinese grown up in China.

Actually most projections are too optimistic as the recent census showed. The slowdown in births was much greater than anyone had forecast.

I expect the next UN projection will come in even lower. But I do believe that China is heading for the low scenario which changes the whole economic outlook for the next couple of decades quite radically.

Changing demogrpahics are wreaking havoc with post-retirement pension and health care funding around the world - China has yet to significantly experience this impact, because their programs are so minimal.

Chinese welfare reforms since the late 1990s have included unemployment insurance, medical insurance, workers’ compensation insurance, maternity benefits, communal pension funds, and individual pension accounts - but they are still in their infancy, as widely nowhere near enjoyed nor as comprehensive as in Australasia,Europe, UK, or US.

However, as expectations and labour participation rise, Chinese benefit funding will hit a brick wall of a very mature, advanced demographic - by comparison, the USA is in a far better position to manage entitlements by extending retirement ages and prescribed minimum health benefits, while increasing tax breaks for private funding and top up.

The conclusion is absolutely right. The size of China's labour force is reversing course in a way that has probably never happened before in history. Prior to 1978, the government estimates 40 million babies were being born each year. But since the one child policy was introduced, the numbers have reduced to only 10 million.

Given the state of the country under Mao, nobody will ever know the true figure pre-1978. But Ma Jiantang is clearly working from the latest census data, and its reasonable to assume this is a lot more accurate than earlier estimates. He is therefore only doing his job by trying to highlight the inevitable change now underway.

After all, those babies not born since 1978 can't now join today's workforce. And even if the one child policy was reversed today, it would still take 15 years before babies born today became available to join the workforce. Meanwhile, China has a 35 year gap which cannot be filled.

Equally, China’s major achievements in increasing life expectancy mean there are already 165 million over-60s now alive, compared to just 65 million in 1975. And by 2020 there will be 240 million according to UN Population division projections. Squaring this demographic circle will not be easy.

Chapter 2 of our ebook Boom, Gloom and the New Normal (www.new-normal.com) has more details in case of interest.

it is well kown (to me anyway) that during and prior to ww2, invading japanese in n.e. china did the inhumane unit 731, but also secretly and in larger scale used chinese men to stud and sire japanese woman and girls up to a million of them, to change the characteristic 'shortness'of japanese men. these females were later repatriated en mass back to japan by the nationalist china after the war.
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today the japans people are indeed taller, and you cannot attribute that to better nutritation becase live was extremely hard in japan immediately following japan's surrender.
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come to think of it, the two now even share the same what I consider bad characteristics, like vanity (china and jpan are world's largest consumer of luxuary brands) and thristy of animal and fishery blood (to be fair, only mostly cantonese for the chinese side and mostly northerners on japns side), yeeeeeeeeeeik.

And what does that have to do with the price of tea in China?
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This board is about demographics and the trends in the size of the Chinese workforce.
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As for the Japanese, if you are facing an aggressive Soviet Union, North Korea and Maoist China, then the Americans probably would look like a credible choice to stick with and develop a relationship, especially for economics.
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Later, China moved to develope similar trade ties with the US, in gaining access to technology and markets, and unlike the Japanese, currying substantial investments, and emulating S. Korea in setting up special economic zones.
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Did China become an economic colony in the 1980s, 1990s and 2000s as a result?